Big payouts, flexible hours, the chance to work with anyone and every – it’s not hard to imagine why there are so many people leaping into a career in real estate. And given all the buzz around housing right now – properties are selling in a heartbeat. Home buyers are enjoying mortgage rates that hover near their all-time low, and estate professionals are soaking up a groundswell of opportunities they may have missed from the previous year’s springtime home-selling season. Why not make hay while the sun shines, right? Still, although real estate is rewarding work, there’s a lot to growing a stable, healthy business – especially if you’re just starting. And it begins, among other things, with a solid financial background. Here are some costs to consider when starting a career in real estate.


As a real estate professional, you will need to be licensed by the state you plan to operate in. The first step towards getting a real estate license is to enroll in a pre-licensing course at an accredited real estate school. Each state, however, has its own set of requirements – prerequisites, if you will – for those interested in becoming licensed real estate professionals. Therefore, the amount of “credit hours”, as well as the price of pre-licensing education, will vary significantly across states. 

Upon having completed a predetermined amount of studying, you can take the state licensing exam. Of course, when budgeting expenses, make sure to account for the licensing exam as its own line item. On average, you can expect it to set you back anywhere between $85 and $200. 

Background checks

Real estate companies are always cautious about the agents whom they hire. They want to make sure that you are trustworthy and safe. The reason why is relatively straightforward. Namely, the moment you are granted an active real estate license, you’ll find yourself saddled with a unique set of responsibilities that allow you to enter clients’ homes, drive them between these properties, and conduct one-on-one meetings. For this reason, it only makes sense that real estate professionals be subjected to robust and detailed background checks. The one-time expense of $40 to $100 won’t break your bank. Still, be sure to take it into account when calculating your real estate agent start-up costs.

Hanging your license with a broker

As a newly dubbed real estate professional, you will need to hang your license with a brokerage to begin practicing real estate. Associating your real estate license with brokers implies that they take you “under their wings”, and what this means for a newly licensed agent is that now you have the chance to gain valuable experience in the field. This experience, however, does not come for free. Instead, it comes for a fee, and two of them, to be more precise – a monthly “desk fee” and a portion of your commission. And pretty much like everything else on our list of costs, these vary dramatically by the brokerage. 

Having to cough up a percentage of every sale’s commission can be a bitter pill to swallow. After all, the commissions typically range between 6% and 8%. That would amount to roughly $7,000 on a $100,000 property. And if the majority of brokers want a slice of the pie – and note that not all of them want a small slice – this benefit can end up costing you a pretty penny, sometimes even half of your commission.

Advance your career

To maintain their active licenses in the state(s) where they practice, brokers and agents must complete a defined amount of approved continuing education each fiscal year or recurring time period. The estimated costs of continuing education will vary from $50 to $300+ per year, but keep in mind that many find it well worth the investment

Passing an exam and applying for a license is the first step, but there’s still so much to learn about prospecting for leads, cultivating strong relationships with clients, negotiating the sales process, and guiding a transaction smoothly to the closing table. This live online course includes eight hours of intensive training followed by eight weeks of coaching and is designed to teach you the specific activities an agent needs to perform on a daily, weekly, and monthly basis in order to be successful in real estate. This program will arm you with business-building skills and critical operating activities utilized by the nation’s most successful real estate agents. You will leave the program prepared to implement your plans and tools immediately in your real estate practice.

Errors and omissions insurance

The truth is that, nowadays, anyone can get a lawsuit for any reason. Even if the claims are groundless or frivolous, legal fees and other related costs can quickly add up, and, before you know it, they’ll eat up all of your cash reserves. Synonymous with professional liability insurance, E&O insurance offers protection for you and your business against any claims made by clients for any error and omission that may have occurred during the business activities and resulted in financial loss. Most errors and omissions insurances cover attorney fees, court costs, as well as any settlements up to your policy limits. That will cost you from $350 to $400/year.

Association fees

After acquiring your license, you may opt to become a member of a local or national association such as the National Association of REALTORS® (NAR). The membership dues for these real estate associations can vary. For instance, NAR raised its annual membership fee from $150 to $156 in 2024. Despite the cost, many real estate professionals regard the benefits of such associations as uniquely valuable.

MLS access

The Multiple Listing Service (MLS) is a platform that empowers local brokers by providing the tools to merge their individual listing databases into a singular, well-organized, and accurate database. This consolidated database substantially boosts marketing efficiency, ultimately leading to higher conversion rates for real estate professionals. The MLS is a powerful tool for real estate professionals, but it can be costly. In fact, the average annual fee for access to MLS in 2017 was $1,200. This fee covers both the cost of maintaining the database and providing technical support to brokers who use it. There are privately owned MLS’s in the market worth doing your due diligence.

Beginning July 1st, 2018, the National Association of REALTORS® board of directors has voted to offer enhanced flexibility for brokers and salespeople in terms of their MLS association. As the new rule dictates, you are no longer tied to a specific MLS and can freely decide which MLS you, your agents, and colleagues join. For in-depth coverage of the NAR ruling, click here. This decision may influence several cost factors when commencing a real estate career.

The new rule exempts companies from mandating all agents to be a part of the same MLS. Even if your brokerage is affiliated with one MLS, your agents can choose to join another without fears of penalties or removal of the company from the MLS. This favorable adjustment presents an opportunity to recruit promising new agents who might not be part of your current MLS.

IDX fees

Internet Data Exchange (IDX) fees are also one of the costs to consider when starting a career in real estate. IDX is the software agents and brokers use to establish a data connection between their website and the MLS. Thus, they’re able to import MLS listings and display them on their own websites. Given that 44% of all buyers start their journey by searching properties online, it’s a win-win situation. For starters, real estate professionals can attract more prospective buyers by showing the most pertinent, appealing property listings to hit the market on their website. Similarly, home buyers get the lowdown on the most recent listings available on the market and absolute confidence that the information is accurate.

Marketing Costs

How much effort, consideration, and creativity you put into marketing yourself as an estate professional plays a large part in determining your success in the industry. It will help you drum up leads, close more deals, and earn more commissions. Still, marketing refers to an extremely broad term – one that may encompass anything from business cards and sponsorship’s, across yard signs and fliers to Facebook ads and Google Pay-per-click. It typically starts, though, with the creation of your business website. Each of these items is an expense of its own. And once the numbers add up, the estimated costs can be up to $1,000/year. However, this category is rather flexible as there are also some low-cost ways to advertise yourself (social media and word of mouth referrals). 

What’s more, knowing your target audience and your market will inform you a great deal about your marketing. Millennial’s, for instance, now make up the largest group of home buyers. If those are the customers you cater to, familiarizing yourself with their style, hangout spots, what they do for fun, etc., will help you effectively tailor your marketing efforts. Being at the center of all the action is that much better. So, for instance, by relocating your practice to one of the places millennial’s are interested in, you’d be hitting the nail on the head. 

Business expenses

The cost of maintaining regular operations will include various business expenses such as:

  • Office space;
  • Cell phone;
  • Internet;
  • Computer software;
  • Meetings with clients;
  • Client gifts;
  • Etc.

Essentially, this category of expenses covers anything you may need for successfully fulfilling your responsibilities as a real estate salesperson. These may vary based on several factors. However, you can expect it will set you back for $500 to $1,000 annually.

Don’t give up

Now that you’ve done your research of all costs to consider when starting a career in real estate, you can build upon it. A good start is to investigate all these expenses in your area. Then, your next step is to carefully devise your business plan and a budget. Do not be discouraged. It’s completely normal for the first year in any real estate agent’s career to be a little lean. As challenging as it may be, accurate anticipation and planning for your start-up costs will help you stay in the game and reap the rewards of this exciting vocation.

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